UNION OF INDIA Vs. K SAMBANDAN

JUDGEMENT

(1.) THIS appeal is preferred under Clause 15 of the Letters patent against the order dated 11th July, 1994 passed by the learned single judge in C. M. P. No. 8680 of 1994 filed in A. S. No. 202 of 1993. C. M. P. No. 8680 of 1994 was a petition filed by the respondent herein for a direction to the respondents who are the appellants herein to relieve the security of immovable property offered in the year 1972 by the petitioner in the C. M. P. and hand over the documents of title deeds in respect of the properties bearing R. S. No. 363/2 (0-50-70 Hec) 367 (0-80-40 Hec) 1330/2 (0-13-20 Hec) and 1329 (0-05-40 Hec) and l/4th share in residential house situate in Poornakuppam village, Ariyankuppam commune to enable him to take part in the public auction. On this very petition, an interim order was passed on 28. 6. 1994 by which the following direction was issued. "for some inconvenience and want of instructions from the party concerned, in spite of intimation sent, the learned Government pleader for Pondicherry is not able to file the counter today as directed by this Court already. In the light of the urgency expressed by the Bar, viz. , that the fresh auction in this case is going to take place in the evening of today or tomorrow, in view of the non-filing of the counter and the request of extension of time may cause hindrance to his right to take part in the auction to be held, keeping in the just a position of this with the relevant point in dispute I feel it is desirable to grant a week's time to the Government Pleader of the State of Pondicherry to file counter-statement in this application. But, with regard to the grievance of the petitioner, Mr. Umapathy. learned counsel for the petitioner requests, (sic.) I hereby direct the petitioner herein to take part in the public auction to be held today evening or tomorrow by the respondents and exercise his right in regard to the framed conditions and rules and his successful bid, if any, shall be accepted only on the condition that the petitioner shall furnish a Bank guarantee to the value of Rs. 20,000 within one week. THIS order is passed without prejudice to the rights and contention of both the parties herein. If for any reason the petitioner fails to furnish the bank guarantee as directed, his interest in the public auction, if any, shall not be ratified by the respondent. Accordingly, this order is passed for the time being. " Thereafter, C. M. P. No. 8680 of 1994 was considered finally and the following order was passed: "heard both. The learned counsel for the Government of Pondicherry-respondent filed a memo that as on today, a sum of Rs. 60,000 and odd is due and payable by the petitioner to the respondent. According to the learned counsel for the petitioner, he has already submitted a bank guarantee to an extent of Rs. 20. 000 in this regard and even so, his document worth about more than Rs. 15 lakhs is with the first respondent. In view of the said position, he is not in a position to take part in the bid to be held tomorrow or in the future with regard to the concerned arrack shop in question. Having considered the prevailing position as on today with a view to give an opportunity to the petitioner as well as safeguard the interest of the respondent, I hereby direct the petitioner to give bank guarantee to the extent of sixty thousand rupees in favour of the respondent within a week from today and in the meanwhile the petitioner is hereby directed to take part in the public auction, to be conducted by the respondent either tomorrow or in the future with regard to the same arrack shop and if the petitioner becomes the successful bidder, his bid can be accepted only after the bank guarantee above referred is submitted and if not even if he is successful, the respondent cannot accept the same. The respondent also in hereby directed to return the title deeds of the petitioner to him immediately after furnishing the Bank guarantee to him and that the respondent shall not be declined to do so. THIS order is passed today for the time being without prejudice to the rights of the respective parties herein to be agitated in the main case. If he has submitted the bank guarantee as above referred, then his successful bid, if any, can be considered in accordance with the rules and procedure. "

(2.) BEFORE we consider the contentions put forth by the learned senior counsel appearing for the respondent in this appeal, we may state the grounds on which the appellants have come up in appeal. The grievance made by the appellants is that such a relief did not flow from the suit out of which the appeal has arisen and the same is pending. Even if the suit of the plaintiff were to be decreed in its entirety, Rule No. 147 of the Pondicherry excise Rules, 1970 (hereinafter referred to as the rules) disqualified the respondent from participating in any auction conducted under the Rules, as long as he continues to be in arrears of any Government dues or excise dues or sales tax in respect of liquor sold by him, that as the respondent continues to be in arrears, even if he had not paid the decree dues passed by the civil court, no order of the nature in question could have been passed overlooking the Rules that in the light of the direction issued by this Court the appellants had no option but to permit the respondent to participate in the auction in spite of the fact that he continued to be in arrears. The fact that under the direction of the court, the respondent has continued to participate in the auction and the auction was confirmed should not be used as a ground for refusing to interfere with the order under appeal, because the decision of the learned single Judge will have the effect of obliterating the provisions contained in rule 147 of the Rules.

(3.) POINT (b): It is not possible to hold that when an appeal is filed in accordance with law and it is pursued, the appellants must be held to have waived the right of appeal merely on the ground that pursuant to the direction of this Court, the appellants have permitted the respondent to participate in the auction and considered his bid offered in the auction. Such a view would be nothing but denying the statutory right of appeal. In support of the contention that the appellants must be deemed to have waived their right, learned senior counsel placed reliance on a decision of the Supreme court in K. G. Dora v. O. Arnama Naidu. A. I. R. 1974 S. C. 1069. Reliance was placed on paragraph 59 of the judgment which reads thus: "be that as it may, the bar to an appeal against a consent decree in Sub-sec. (3) of Sec. 96 of the Code is based on the broad principle of estoppel. It presupposes that the parties to an action can expressly or by implication waive or forgo their right of appeal by any lawful agreement or compromise, or even by conduct. Therefore, as soon as the parties made the agreement to abide by the determination in the appeal (A. S. 668) and induced the court to pass a decree in terms of that agreement, the principle of estoppel underlying Sec. 96 (3) becomes operative and the decree to the extent it was in terms of that agreement, became final and binding between the parties. And, it was effective in creating an estoppel between the parties as a judgment on contest. Thus, the determination in A. S. 668 - that Kadakalla was not an estate became as much binding on the respondent, as on the parties in that appeal. " From the aforesaid observations of the Supreme Court it is clear that those observations related to an appeal filed against the consent decree. As Sec. 96 (3) itself bars such an appeal, it has been held that when the parties agree for a certain decree to be passed, they must also be deemed to have agreed to waive the right of appeal, because the statute bars an appeal against the consent decree. That being so, the proposition laid down therein cannot be applied to the facts of the case. Hence, point (b) is answered in the negative.